Senate President Speaks on Pension Bill
FRANKFORT, Ky.- Kentucky’s special legislative session could be coming any day.
Senate president Robert Stivers says for the most part it is now just a matter of timing.
At an event in Frankfort, Stivers said “I understand the governor’s office has been talking to multiple House members. They feel they’re going to closer to gathering up the votes. So from that perspective, I think it’s probably more an issue of scheduling because after we’re out of session and we’re citizen legislators, individuals have their jobs.” Stivers elaborated, “I know that some members have had business outside of town outside of the state, there’s graduations that parents were wanting to go to to see their children graduate, there’s just those normal things that you have had to put off while during session. I think it now becomes a component of getting a couple more folks here in there and then a scheduling issue before July 1.”
The Associated Press reports that House Speaker David Osborne doesn’t believe the House has the votes yet to pass the bill.
Governor Matt Bevin vetoed a pension bill in April. Stivers wouldn’t say which bill he prefers, but said there are some differences between the two bills.
Stivers explained, “I think probably the biggest component; there’s the 30 year pay out capping it you know that’s where we debate whether you want to give a little bit more latitude to the entities that will struggle of paying this, give them 10 more years and make it a 40 year payout, or at a point in time as long as they can maintain it and you’re keeping the integrity of the pension system in place.”
He continued, “The mechanism for which you can control that, one of the governor’s complaints and I think there was a recent case coming down was really justify the position that I held, is that how do you enforce this? How do you have an entity that will live by the terms of the statute unless you have some type of enforcement provision? There is potential litigation and withholding of funds. That becomes to me somewhat tedious to me, because if you withhold the funds that they are to get, then they can’t make the payments and they can’t provide the services.”
Stivers finished, “Our alternative was to take over or temporary suspension until you could get their financial house in order. The governor thought that would be litigated. There was a recent case that came down that Judge Shepard was overturned, until you miss a payment you don’t have standing in which to going to court. It was a hammer, and as an incentive to stay on course with your contributions, but those are the two big differences. And, I would say the hard freeze, that if you had an entity that wanted to get a better discount rate all the different types of technical terms you went to a hard freeze, saying that’s all the accumulated credit and individual could get in there defined benefit system those of the three major systems.”
Democrats have said they would support coming in for a special session to freeze the current rate. Stivers said he wouldn’t support that. “You can’t freeze the rates and do nothing because this is what will happen with just a freeze. That 87% will grow it will be a greater cost because your legacy costs aren’t being reduced, their being increased. So, that 87% or $8700 per $10,000 will go up to about $9500 per $10,000 of payroll and then your bonding agencies start looking at that and start saying are you really making significant strides towards hearing or dealing with your pension problem.”
Governor Bevin’s bill is rumored to have the votes to pass the Senate, but not the House. In a letter to the General Assembly, Bevin said he will not call the session until he has the votes to pass the bill.